A company focused on helping enterprise IT systems comply with government regulations has decided Canadian firms are ready to tackle the same challenge as their U.S. neighbours.

Orchestria, based in New York, recently hired a regional director to form business relationships in Canada with organizations that would be interested in its active policy management software. The suite of programs is designed to stop messages that could violate a government regulation from being sent through e-mail, instant messaging or other forms of electronic communications.

Paul Johns, Orchestria’s vice-president of global marketing, said the company has been selling in the U.S. for about two years, and has seen deployments of its products in many of the major capital market firms. Orchestria’s product has come out at a time when accounting scandals at firms such as Enron and WorldCom have brought more focus around compliance issues, he said, and financial institutions here have been as interested in bringing systems in line with U.S. regulations as Canadian ones.

“The regional nature of the Canadian market is unlike any other market I’ve ever seen,” he said. “You could be a single entity offering financial services, but as a registered rep based in Toronto, you may only be able to sell certain financial services products in your region. How can you be sure the things you’re sending via e-mail are not crossing one of the territories, which is a non-compliant activity?”

Compliance software has often involved a long sales cycle, Johns said, in part because IT managers and CIOs have had to figure out the impact such tools would have on their e-mail servers or other systems. In many customer meetings, he added, he has sat down with coworkers who have spent very little time together.

“You always had the situation where you sell it twice,” he said. “(Those handling compliance issues) would go to IT, who had the money, and IT would try to dilute it.”

Orchestria has already formed a partnership with FlexITy, a Toronto-based consulting firm that will use its products in an integration and testing lab it set up almost a year ago. Ron Stewart, FlexITy’s executive vice-president, said the potentially disruptive nature of compliance applications means many firms want to see the software in action before they commit to a deployment.

“They tend to feel that they’re being pushed down certain areas,” he said. “A lot of customers are meeting with large consulting firms who show them something that’s been developed, but the real question is how to put it into practice.”

Even as the compliance market matures, Johns said the threat of investigation and a stain on a corporate reputation should allow companies like Orchestria to maintain their momentum.

“The thing that gets a major firm answering the phone is when they’re staring down the barrel of a $100-million fine,” he said, adding that proactive firms who have communications policies under control are in a better position to respond when and if the time comes. “(Regulators) will take a much softer line than they would with the other firms that don’t provide the information in the same period of time.”

Orchestria’s product line includes tools for policy specifications, policy enforcement, a pre-built policy library and applications for “intelligent surveillance” of electronic data.